The Sydney Morning Herald said salvage operations could be diplomatically challenging, given that the vessel appears to have run aground within the Philippines' exclusive economic zone.

The stricken vessel has in the past been involved in aggressively discouraging Filipino fishing boats from the area, the Morning Herald said.

The accident could not have come at a more embarrassing moment for the Chinese leadership, who have been pressing territorial claims and flexing the country's muscle ahead of a leadership transition later this year.

An Association of Southeast Asian Nations (Asean) foreign ministers' meeting in Phnom Penh, Cambodia, ended in disarray on Friday, without a code of conduct for resolving conflicts in the West Philippine Sea.